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FAQ

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THE PROJECTION OF THE RISE OF GAMBLING REVENUE IN SOUTH AFRICA TO RISING TO R30
BILLION IN 2019

Since 2014, the gambling revenue has improved to some reasonable extent, despite
the weakening economies and the challenges. The gross gambling revenue in South
Africa has posted their second-largest annual increase in the last five years as
casino takes the most significant share as casino rises to 4.5% in the year
before. Generally, as of 2014, the revenue generated by the gambling revenue in
South Africa is R2.1 billion. The gross gambling revenue across those sectors is
expected to rise R23.9 billion straight to R30.3 billion. The annual increase is
4.8%

We got some highlights from the fourth annual edition of the PWC, and the title
is “Taking the odds: Gambling outlook for 2015 – 2019. The publication is on a
detailed analysis of the gambling industry. Each of the segments as the key
trend which is observed, the challenges, and the prospect. The national gambling
board in South Africa can be said to be the source of this data. Looking at the
way it pertains to Nigeria, figures are extrapolated and derived from companies
based on selection. While talking about the Kenya figures, they are extrapolated
and derived by the casino taxes

Out of the three countries that the research was carried out on, the country
that happens to have the largest gambling market in South Africa. The gambling
revenue is approximated to be R17.2 as of 2014, while in Nigeria and Kenya, they
are R479 million and R2118 million respectively

The gambling industry in South Africa made it clear that the gambling industry
in South Africa will remain exciting and vibrant just like it has always been,
but then it is essential to state the fact that the sector is facing some
challenges as there are changes in the regulation of the economic climate

One of the issues that are having a debilitating effect on the sector is illegal
gambling online. Aside from this, some casino is as well facing some competition
from other facilities that can be found in their areas


THE SOUTH AFRICAN GAMBLING MARKET

In South Africa, part of the most significant gambling component is the casino
market, as the total revenue amounts to 72% of the gambling revenue in 2014.
This is a reflection of the maturation of the segment. As things stand, 38 out
of the 40 are now running smoothly. The department of trade gave an intention to
increase the number of licenses on the #1st October 2015

Other forms of gambling are posing high competition, and they include limited
payout machines, electronic bingo terminal, and some other sport betting

Gambling taxes and levies

As of 2014, the total amount of levies and taxes is R2.5 billion. The amount
that was estimated on the VAT Output is R1.9 billion, and you can probably
consider it to be 11% of the gambling revenue

Casino Gambling

The leading province was Gauteng, and the revenue is generated as of 2014 is
R7.2 billion. The western cape and the KwaZulu-Natal, each of them has like 5
casinos that carry out a better operation. These provinces are so significant,
and the amount they hold in the gambling revenue is 76.1%

As of 2015, the projection that was made was for the gambling revenue to drop to
0.4%, and this is making the absolute reflection of the slow economy. After then
we try to figure out the better improvement, the economic condition was able to
maintain its stability, and this gives some individual operators such as Tsogo
Sun and the Sun International to make an expansion of some properties. At this
same moment, the casino industry will as well be faced with significant
competition as the Bingo Outlet and the LPM expand.

Limited Payout

The limited payout machine is primarily located in the clubs, restaurants, and
bars, and they accounted for 9% out of the gross revenue in 2014. The projection
was made that in 2019, it will expand by 10.3%. Of course, the introduction of
new sites and machines is responsible for the expansion of the market. Having
said this, the competition that arises from the terminal of the electronic Bingo
will lead to the slower growth for the LPM

Bingo

This happens to be the smallest category as it accounts for 5% in the gross
revenue. In 2014, the availability of Bingo was made in KwaZulu-Natal, and it
derived much benefit from the North West and Eastern Cape for a full year.
Guateng dominates the market continuously as it generated R903 million, the
Eastern Cape followed it by R114 million. The introduction of the electronics
terminal are yet to be introduced into Free State, Limpopo, Northern Cape and
the Western Cape. Expectation is placed on Bingo to turn out to be the category
that grows at a very fast pace. Projection was made for 19% compound annual
increase, then in 2014 it is R1.1 billion and it will later rise to R2.7 billion
in 2019

Sports Betting

The dominant market in sports betting market as 2014 is the horse racing, it is
at R1.9 billion. As at 2015 there were speculations that the lack of wagering
that is related to the world cup can have a debilitating effect on the sports
betting market

National Lottery

Through the forecast period, the National Lottery is expected to remain the
category that experiences the slowest growth. The National Lottery projects that
the Gross Gambling Revenue will rise from R2.28 billion then in 2014, and in
2019, it will have risen to R2.33 billion

Casino Gambling in Nigeria

In 2014, the gambling revenue rose by 17.1%, as they continue the annual
increase of double-digit. The Ebola virus that hit the country in 2014 does not
affect the casino. The only thing that affected it was the slowing growth rate
of the economy, and this is as well responsible for the slow growth in the
industry. The forecast that was made then was that there would be 8.5% compound
annual rate in USD68.9 million in 2019

Of course, Nigeria is expected to witness an expansion compare to South Africa
and Kenya

Casino Gambling in Kenya

The casino gambling revenue in Kenya rose by 6.9% in Kenya as of 2014; in 2013,
there is an 11.2% increase. Between 2009 and 2011, the annual growth is 24.2%.
The conclusion was that the 20% withholding tax that was imposed id responsible
for the slow down that occurs. Additionally, the competition that arises from
the national lottery can as well contribute to this

Just like Nigeria, Kenya has been disturbed by terrorism, and this has hampered
tourism. Having said this, the casinos in the industry do not have to rely on
tourism before they run successfully. The forecast that was made is that there
is an increase of 7.5% in the compound annual rate and it rises from 20.1
million USD as of 2014, to 28.9 million USD in 2019

Conclusion

Calicchio concluded that the overall gambling industry in Nigeria and South
Africa is changing from time to time. Having said this, the industry will be
affected adversely as it experiences a slower economic growth. But then if you
can improve the economic condition, spending will be fueled at a very fast rate.
While in Kenya, the growth remains stable during the next five years in
comparison 2014 increment

To sum it up in the three market regions, the revenue is totaled to be R19.9
billion, which is estimated to be 1..8 billion USD as of 2019. The annual
increase is 2%


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